Essay Sample on Canada and Germany Food Trade

Introduction

Trade in food and food products among the world's nations are increasing rapidly, and from this progression, new supply chain partners, from different geographical areas, are forming trade partnerships. Among the top priorities of the majority of the federal governments are the improvements of trade and commerce, guaranteeing domestic tranquillity, and preserving public health. Accomplishing such priorities is essential in forming and upholding the wealth of nations. Nations such as Germany and Canada, for instance, have very firm administrations, are partners in commerce and food trade among other export and import services, and appreciate high rates of food safety and public health. It is not surprising that these countries fall among the wealthiest in the world. Attaining state urgencies, particularly those linked to the promotion of trade in food products as well as conserving food policy through food safety, would greatly profit from global attempts of harmonizing food trade agreements and safety legislation. This essay discusses the food trade agreement between Canada and Germany, Germany's economic environment and its consumption habits, effects of exchange trade between the two nations, and how Brexit will influence trade between Canada and Germany.

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The food trade agreement prohibits exporters from bringing milk, meat, and other animal products into Germany. For this reason, Germany rarely imports fresh foods to prevent the introduction of animal diseases. The EU commission tries to ensure that the food supply in Europe is the safest by setting such food trade agreements with their trading partners such as Canada and other non-EU countries (Rudolf, 2014). With the firm tradition of innovation and research, Germany provides robust prospects for Canadian trades in several sectors. In 2016, Germany was the second most important goods export market in the EU and ranked seventh universally, with Canadian exports totaling to around CAD 4.1B (Hassel, 2017).

Canadian exports to Germany get boosted by the Canada-EU trade agreement. The nation's highly co-operative trade environment, political and economic stability, and market size make it a quite beautiful country for exporters. Canada reached into a food trade agreement with the European Union nations including Germany through the Comprehensive Economic and Trade Agreement concluded in August 2014. The trade agreement has seen a ninety-eight percent cut in tariffs between Germany and Canada (Rudolf, 2014). Elements of the agreement emphasize that it will see an improvement in the import and export sector trade between Canada and the European Union.

Since German is famous for its status as the leading exporting country in Europe, most goods are manufactured from there. Most of their export goods comprise of textiles, foodstuffs, machinery, chemicals, and vehicles. Germany's economy also relies on its large agricultural industry which focuses on poultry, pigs, cattle, cabbages, fruit, sugar beets, barley, and wheat farming. Germany is projected to display good performance in the economic sector in the next coming years sustained by the strengthening economic environment over the EU (Belke, Duboya & Osowski). Germany's beverage and food industry are the fourth-largest industry sector in the nation - with a production value of approximately 179.6 billion euros and a possible outlook for years to come. The most significant industry sector by production value are confectionary 8%, baked goods 10%, dairy products 15%, and sausage and meat products 24% (Hassel, 2017). Germany maintains the lead in the beverage and food market industry as it grows to encounter the global challenge of the more significant demand for healthy and safe food products.

The people of German generally consume higher amounts of animal products and fewer numbers of plant foods. Considerable variances in food consumption are seen among the diverse populace (socio-economic, age, and sex) (Heuer, Krems, Moon, Brombach, & Hoffmann, 2015). German men arer known to consume more cooked foods, while women eat more raw vegetables, and concerning the age groups, individuals between ages fifty-one to sixty-four happen to prefer a high vegetarian diet. Men generally take alcoholic drinks compared to women who take drink fruit juices, coffee and tea (Heuer et al., 2015). The elderly and women seem to be making healthier food choices with their food consumption habits being almost in line with the dietary guidelines. The intake of the majority of food groups in Germany compares to those of other European nations, while the consumption of beer, fresh juices, and bread is higher in Germany (Eberle & Fels, 2016).

While the trade between Germany and Canada continues being dominated by self-interest, although the export and import trade is the foreseeable outcome of global economic integration, several elements are affecting the manner of foreign trade, such as fluctuations in the exchange rates. The nominal exchange rate for Germany remains weaker as a result of its link to weaker eurozone economies (Gopinath, 2015). Typically, a nation displaying constantly low inflations projects a rise in its currency rate, since its purchasing power rises proportionally to other currencies. With a depreciation in the number of Euros, Germany's exports will be cheaper and will be beneficial only to the exporting firms while importing the raw materials will face a rise in the import's costs. An appreciation, on the other hand, will make it cheaper for purchasing of fresh products while exports become more expensive thus reducing the competitiveness between Canada and Germany (Xiong & Beghin, 2017). The two nations should use fixed contracts for their trades, especially when purchasing imported raw materials. That implies that temporary variations in the exchange rate would not have much of an impact. The costs of trade in could be signed for the advance of twelve to eighteen months. Exporters might as well apply future options in hedging against dramatic movements in the exchange rate. Such fixed agreements assist in reducing the uncertainty around depreciation and appreciation in the exchange rates between trade in the two nations.

Germany is the top business nation in the European Union in terms of capacity. Britain's exit from the EU will reduce most of the advantages of the single market for German's industries, particularly the automotive industry. Brexit is already causing damage to Germany's trade with the UK and other non-EU members such as Canada. Germany's exports would have a higher chance of suffering - especially the processed foods industry - more than the imports. Although since Germany is the EU's number one economy spot, its dependence on trade with Britain is relatively low. Canada is Europe's twelfth most crucial business associate. Hence, the exact nature of Brexit's final negotiations will significantly affect Canadian businesses operating in Europe and most especially in Germany (Belke, Dubova & Osowski, 2018).

Even though trade between Canada and Germany will continue, Canada's investors ought to cautiously weigh the outcomes of Brexit negotiations since the move might slow current export trades to Germany. Whereas the unreality might be challenging, it could also create new trading prospects (Xiong & Beghin, 2017). There are always risks and opportunities at the same time. Hence businesses in both Germany and Canada ought to survey their situations and make informed decisions that will not drastically affect their trade agreements. For the long term, Canadian firms will have to create strategies for both Germany and the EU markets, with the sense that, the Brexit aftermath, will not cause barriers to immigration, investment, or trade.

Conclusion

In conclusion, almost every nation globally trades with one another; countries export their products to other states and similarly import gods from others. Exchange rates play a crucial role in this process. For instance, when Canada imports goods from Germany, they usually do so in Euros. The importers have first to exchange their Canadian dollars for Germany Euros, then purchase products using those funds. The same applies when it comes to Canadian exports to Germany; when buying Canadian products, Germany has to exchange their currencies for Canadian dollars. Germany's food industry is motivated by the need to directly respond to the growing and varying consumer needs, as well as a commitment to deliver the very best. The resulting quest for wellness and health products, an aging population, and raising health awareness help some market niche actors such as Canada to be noteworthy trade partners in the food industry. For most people, German cuisine invokes images more enthusiastic. Although, the fact is that German's cultural diet is extensively assorted than most cliches would want to believe. The European Union's largest beverage and food market give more for its producers and consumers similarly. Germany and Canada thus enjoy a friendly and close partnership, reflected in their active cooperation on the global stage, as well as their excellent investment and economic relations.

References

Belke, A., Dubova, I., & Osowski, T. (2018). Policy Uncertainty and International Financial Markets: The Case of Brexit. Applied Economics, 50(34-35), 3752-3770. Retrieved from https://www.econstor.eu/bitstream/10419/156218/1/876650272.pdf

Eberle, U., & Fels, J. (2016). Environmental Impacts of German Food Consumption and Food Losses. The International Journal of Life Cycle Assessment, 21(5), 759-772. doi: 10.1007/s11367-015-0983-7

Gopinath, G. (2015). The International Price System (No. w21646). National Bureau of Economic Research. https://www.nber.org/papers/w21646.pdf

Hassel, A. (2017). No way to escape imbalances in the Eurozone? Three sources for Germany's export dependency: industrial relations, social insurance, and fiscal federalism. German Politics, 26(3), 360-379. Retrieved from http://www.ankehassel.de/downloads/hassel_imbalances_german_politics_final.pdf

Heuer, T., Krems, C., Moon, K., Brombach, C., & Hoffmann, I. (2015). Food Consumption of Adults in Germany: Results of The German National Nutrition Survey II Based on Diet History Interviews. British Journal of Nutrition, 113(10), 1603-1614. doi: 10.1017/S0007114515000744

Rudolf, B. (2014). Food Standards in Trade Agreements: Differing Regulatory Traditions in the EU and the US and Tips for the TTIP. Retrieved from https://www.swp-berlin.org/fileadmin/contents/products/comments/2014C49_rff.pdf

Xiong, B., & Beghin, J. C. (2017). Stringent Maximum Residue Limits, Protectionism, and Competitiveness: The cases of the US and Canada. In Nontariff Measures and International Trade (pp. 193-207). doi: 10.5771/9783845289021-240